Cancer drug prices rising far faster than inflation

(Reuters Health) - The prices of injectable cancer drugs - even older medicines around since the 1990s - are increasing at a rate far higher than inflation, researchers report in the Journal of Clinical Oncology.

The study, led by Dr. Daniel Goldstein of Emory University in Atlanta, looked at 24 injectable cancer drugs approved since 1996 and found the average increase was 25 percent over eight years. After inflation, the average increase was 18 percent.

The prices of some drugs were going up by an average of 6 percent or more per year when the inflation rate was just under 1.1 percent.

The results come in the wake of widely publicized cases of drug price gouging, most notably for Turing Pharmaceuticals’ anti-parasite drug Daraprim and Mylan’s EpiPens, designed to prevent death after a severe allergic reaction. Among cancer drugs, Novartis’ Gleevec, which cost $26,000 in 2001 now costs more than $140,000, even though generic versions of the once-a-day pill are available.

“We knew about anecdotal stories of individual price increases, but we didn’t know what the overall landscape of price changes were for all these drugs. So we set out to analyze a wide selection,” Goldstein told Reuters Health in a telephone interview.

“What we’re seeing in this study is not those massive overnight hikes,” he said. “But we’re seeing a gradual price creep in these patented drugs, and over the course of 10 years, that gradual creep becomes significant.”

The team also found that, unlike just about every product, those increases were unaffected by the addition of competition, or the discovery of a new use for the medicine.

“Even when competitors enter the market, the price still continues to go up. You would expect, with more competitors, the price would go down,” Dr. Ravi Gupta of Johns Hopkins Hospital in Baltimore, who reported on dramatic naloxone prices increases last year in a New England Journal of Medicine analysis, told Reuters Health by phone. He was not connected with the latest research.

Such increases are driving up health insurance costs and, in some cases, patients who are facing high out-of-pocket costs may be skimping on life-saving treatments because they can’t afford them.

When inflation was taken into account, only two of the 24 drugs tracked by the Goldstein team showed a decline. Nine averaged price hikes of at least 3 percent per year.

Some of the most striking examples among injectable drugs:

- Seattle Genetics’ brentuximab (brand name Adcetris), which cost $19,482 per month when it was introduced, has gone up 29 percent after inflation during the past four years.

- Spectrum Pharmaceutical’s liposomal vincristine (Marqibo), with a whopping monthly cost of $34,602, went up 18 percent in the past three years.

- Another Spectrum product, pralatrexate (Folotyn), which cost $31,684 at launch, rose in price by 31 percent over six years after inflation was taken into account.

Even the prices of older cancer drugs have been showing dramatic rises.

- Novartis’ nelarabine (Arranon), which typically cost $18,513 a month when it was launched, has logged a post-inflation increase of 55 percent over the past decade.

- Since 2005, Genetech and Biogen’s rituximab (Rituxan) has increased in price by 49 percent.

The study used average U.S. sales prices published by Medicare. Unlike other countries, the government-run Medicare program is prohibited by federal law from negotiating lower drug prices with manufacturers.

“In a normally functioning market, competition should decrease prices,” Goldstein said. “But we saw competition actually seems to drive prices up. We don’t specifically have evidence that the companies are talking to each other and raising their prices simultaneously, but one could consider that as a possible conclusion from these findings.”

“Cancer medications are some of the most expensive medications, particularly when they’re first launched. To see the price increase even after the launch is a significant addition to the conversation,” Gupta said.

With the new data on injectable cancer drugs, “We’re just providing an extra piece of the jigsaw puzzle in what’s happening in drug prices,” Goldstein said. “Some type of regulation is needed on drug pricing in many different settings - for generic, drugs, for drugs entering the markets and for what happens after their launch. It’s a complex issue.”